JPMorgan Keeps Laopu Gold At Overweight, Sees Gradual Recovery

JPMorgan kept its Overweight rating on Laopu Gold (06181) and a target price of HK$891, saying it has greater confidence that the company’s second-quarter slowdown was not necessarily structural, according to ETNet. The bank said it expects a gradual sequential recovery and forecast third-quarter and fourth-quarter earnings of about RMB800 million and RMB1.2 billion, respectively. It added that short-term sales remain tied to gold prices, with the Mid-Autumn Festival and National Day holidays the next key watchpoints. JPMorgan said the second-quarter weakness appeared more cyclical than structural, driven mainly by two rounds of gold-price declines in April and June and amplified by a relatively rigid pricing response. It said retail momentum has improved more clearly since mid-August, with several Qixi peak days rebounding to last year’s strong levels. The bank also said all boutiques remained profitable even in the weak second quarter, while gold products proved more resilient during volatility. The bank sees improved visibility on Laopu Gold’s medium-term growth drivers, including boutique optimization, VIP customers and overseas expansion. Laopu Gold plans to open one new boutique and optimize 10 to 12 existing boutiques in 2026, while stepping up brand building through premium malls and outdoor advertising. It is also building a more systematic VIP customer platform and plans to expand overseas more proactively, with about four stores a year launched cautiously in the medium term.